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Certificate of origin: Splendid idea, but...

5th April 2012
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Editorial Cartoon

The government has announced that mineral exports from Tanzania will now bear Certificate of Origin tags in a move to check the decades-long smuggling of our resources.

Accordingly, it is due to organise a four-day fair-cum-conference dubbed Arusha International Gemstones, Jewellery and Minerals Fair beginning April 26 to tell importers that non-certified gem imports would be restricted.

Briefing journalists in a meeting in Dar es Salaam yesterday, Energy and Minerals minister William Ngeleja said the government has been making efforts to ensure that Tanzanians benefit from the minerals their country is blessed with.

That would be implemented through a wide range of measures, including banning the exportation of raw gemstones.

We believe that the government is determined to curb mineral smuggling and it will therefore walk the talk contrary to what happened in 2010 when it banned the exportation of unprocessed tanzanite in a bid to raise its contribution to the economy through local processing, but only to change its mind only months later.

The initial ban which came in the wake of the landmark enactment of a new mining law aimed at putting the exploitation of gemstones fully in the hands of indigenous Tanzanians.

This however could not materialise and most gemstone mining remains in the hands of locals while major mineral deals in the processing markets are still the preserve of other countries.

The government deserves kudos for taking this bold move in restricting gemstone exports by using the Certificate of Origin. But it ought to be extra vigilant on the use of the document because it is without limitations, sometimes very serious ones.

Under the Certificate of Origin (often abbreviated as CO or COO), a document is completed by the exporter or its agent and certified by the issuing body as proof that the goods in a particular export shipment have been produced, manufactured or processed in a particular country.

Nevertheless, according to the 1923 Geneva Convention relating to the Simplification of Customs Formalities, the term ‘origin’ does not refer to the country where the goods are shipped from but to the country where they are made.

However, in the event the products are manufactured in two or more countries, ‘origin’ is obtained in the country where the last substantial, economically justified working or processing is done.

In the case of tanzanite, which is found and mined only in Tanzania but processed in India, Germany and the US, the use of COO would somehow hard to establish.

That apart, an often used practice is that if more than half the cost of producing the goods originates from one country and the ‘national content’ is more than 50 per cent, then, that country is acceptable as the country of origin.

Determining the origin of a product is important because it is a key basis for applying tariff and other important criteria. But in the odd case of tanzanite, it is crucial that the government come out clear and determine the method that would perfectly work for the benefit of Tanzanians.

In the circumstances, it could as well decide that even exports be wholly handled by Tanzanian citizens themselves or the state as not all exporters need a COO.

SOURCE: THE GUARDIAN
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